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Cloud Platforms vs. On-Premise Solutions What's the difference?

Deciding between Cloud Platforms vs. On-Premise Solutions is usually a common dilemma within companies today. And there are many factors to consider to decide if a cloud infrastructure is appropriate. On the other hand, there are many companies that cannot make the leap to the cloud and instead rely on on-premises applications and software to do business.

In the world of e-commerce, the choice between using a cloud platform or an on-premise solution is a crucial point that can influence the success and efficiency of a business.

With the rise of digitalization and growing demand for more seamless online shopping experiences, businesses are faced with the challenge of selecting the most appropriate technological approach for their operations.

In this article, we will share the features, advantages and disadvantages of each model: cloud platforms, which offer flexibility and scalability, versus on-premise solutions, which provide greater control and customization.

By understanding these differences, if you are the owner and/or manager of an online store you will be able to make informed decisions that drive the growth and efficiency of your business in this competitive digital commerce market.

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Cloud Platforms vs. On-Premise Solutions

Cloud Platforms vs. On-Premise Solutions How are they different?

Simply put, the difference between on-premises software and cloud software is location. On-premises software is installed and run on the company's own hardware infrastructure and hosted locally, while cloud software is stored and managed on the provider's servers and accessed through a web browser or other similar interface.

It's no surprise that cloud computing has grown in popularity so much, as its appeal and promise offer new flexibility for businesses, from saving time and money to improving agility and scalability.

On the other hand, on-premise software (installed on the company's own servers and behind its firewall) was the only offering for organizations for a long time and can continue to adequately meet the needs of your business (think, "if it's not broken then don't fix it.) 

Additionally, on-premises applications are typically reliable, secure, and allow businesses to maintain a level of control that the cloud often does not facilitate. But there is a consensus among IT decision makers that, in addition to their on-premises and legacy systems, they will need to leverage new SaaS and cloud applications to achieve their business objectives.

Let's look at each concept in a little more detail.

Cloud Platforms

The truth is that cloud platforms have revolutionized the way businesses manage their e-commerce operations.

If we want to think about a definition, we can say that cloud platforms are software systems that offer e-commerce services over the Internet, eliminating the need for local physical infrastructure. Instead of running on local servers, these solutions are hosted on remote servers managed by cloud service providers.

These are examples of cloud platforms for ecommerce:

  1. BigCommerce: It is a popular cloud-based e-commerce platform that offers powerful tools for creating and managing online stores. With features like unlimited scalability, complete customization, integration with multiple sales channels, and a robust set of marketing tools, BigCommerce is a solid option for businesses of all sizes.
  2. HCL Commerce Cloud: is an integrated and composable enterprise e-commerce solution that delivers more powerful B2B, B2C and B2B2C customer experiences, all on the same platform. HCL Commerce Cloud is owned by HCLSoftware, a division of HCLTech, which develops, markets, sells and supports software for AI and automation, data, analytics and insights, digital transformation and enterprise security.
  3. Adobe Commerce: : It is a leading e-commerce platform that offers a robust and scalable solution for businesses of all sizes. With a wide range of features and functionality, such as catalog management, advanced customization, SEO optimization, and an ecosystem of extensions, Adobe Commerce enables businesses to create exceptional online shopping experiences.

Some important advantages of cloud platforms

  • Global accessibility: One of the main advantages of cloud platforms is their ability to provide global access to e-commerce infrastructure. Users can access the platform from any location with an internet connection, facilitating remote collaboration and instant access to data and management tools.
  • Scalability: Cloud platforms offer unprecedented scalability, allowing businesses to quickly adapt their computing resources to fluctuating market demand. From seasonal peaks to organic growth, these solutions can scale vertically or horizontally to meet changing business needs.
  • Automatic Updates: Cloud platform providers are responsible for maintaining and regularly updating the underlying software. This removes the burden of update management from users, ensuring they are always using the latest version of the software with the latest features and security improvements.
  • Predictable costs: Many cloud platforms operate under a subscription-based pricing model, allowing businesses to forecast and control their costs more effectively. Additionally, initial capital expenditures are typically minimal compared to on-premise solutions, as a costly hardware investment is not required.

Some disadvantages to consider:

  • Dependence on Internet connectivity: Although global accessibility is an advantage, it can also be a disadvantage if the Internet connection is intermittent or unreliable. Reliance on connectivity may make it difficult to access the platform in areas or markets with poor network infrastructure.
  • Limited customization: While cloud platforms typically offer a wide range of out-of-the-box functionality, customization can be limited compared to on-premise solutions. This can be problematic for companies with specific customization requirements or integration with existing systems.
  • Possible additional costs: Although subscription-based pricing models may offer predictable costs, some additional functionality may be available only through add-ons or premium services, which can increase operating costs in the long term. It is important to carefully evaluate total costs of ownership before committing to a cloud platform.

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On-Premise Solutions

On-premise solutions represent a traditional alternative in the world of e-commerce, offering a more rooted approach to managing infrastructure and data within the company's facilities. Let's now look at the features, advantages and disadvantages of this model.

When defining on-premise solutions, we refer to software and hardware systems that are implemented and operated in the company's physical facilities, instead of being hosted on remote servers in the cloud. This implies that the company is responsible for the acquisition, installation, configuration and maintenance of the infrastructure necessary to run the e-commerce platform.

These are On-Premise examples for e-commerce:

  1. Magento Open Source is an open source e-commerce platform that allows businesses to create highly personalized and scalable online stores. Being an on-premise solution, users have the flexibility to host the platform on their own servers and customize it according to their specific needs. Magento Open Source offers a wide range of features such as product management, payment processing, marketing tools, and advanced analytics.
  2. PrestaShop is another open source ecommerce solution that can be implemented on company premises. With PrestaShop, users have full control over their online store infrastructure and data. The platform offers a variety of features, including catalog management, order processing, advanced customization, and a wide selection of plugins and modules to expand store functionality.
  3. WooCommerce (self-hosted): Although WooCommerce is known for being a WordPress-based e-commerce solution, it can also be implemented as an on-premise solution when hosted on the company's own servers. WooCommerce provides great flexibility and control over the online store, allowing users to completely customize the appearance and functionality of their site. With a wide range of extensions available, WooCommerce offers features like inventory management, payment processing, and marketing tools to help businesses grow online.

These are some advantages of On-Premise Solutions:

  • Total control: One of the main advantages of on-premise solutions is the level of control they offer companies over their infrastructure and data. By keeping all systems on-premise, companies have the ability to manage and customize every aspect of the platform to their specific needs.
  • Unlimited customization: Unlike cloud platforms, on-premise solutions offer unlimited flexibility and customization. Companies can fully tailor the platform to their unique business processes and technical requirements, enabling a greater degree of differentiation and competitiveness in the market.
  • Internal connectivity: Running on business premises, on-premise solutions are available even in the absence of an Internet connection. This ensures greater availability and reliability of the platform, especially in environmental environments where Internet connectivity may be intermittent or unreliable.

Disadvantages you should consider:

  • High initial costs: Implementing on-premise solutions usually requires a significant investment in hardware, software and human resources. Startup costs can include purchasing servers, software licenses, IT staff, and implementation costs, which can be prohibitive for many businesses, especially smaller ones.
  • Maintenance and updates: Unlike cloud platforms, where updates are managed by the provider, companies are responsible for maintaining and regularly updating the infrastructure and software in on-premise solutions. This may require additional resources and time to ensure that the platform functions optimally and is protected from security vulnerabilities.
  • Limited scalability: Scaling an on-premise solution can be more complex and expensive than on a cloud platform. Adding new servers, increasing storage capacity, and optimizing infrastructure may require additional investments in resources and time, which may limit long-term business growth.

Hybrid solutions

Another possibility to consider is that there are hybrid solutions. That combines elements of cloud platforms and on-premise solutions for ecommerce. These hybrid solutions are designed to offer the best of both worlds, taking advantage of the benefits of the cloud and the customization of on-premises solutions. A couple of examples of these hybrid solutions include:

  1. Salesforce Commerce Cloud: It is an ecommerce platform that offers a hybrid solution that combines the flexibility of the cloud with the ability to integrate with existing on-premises systems. This platform allows companies to take advantage of the scalability and global access of the cloud, while offering customization options and control over data and infrastructure.
  2. Oracle Commerce Cloud: : is another ecommerce platform that offers a hybrid solution for companies that want to combine the flexibility of the cloud with the security and control of on-premise solutions. This platform allows businesses to easily integrate their online store with existing internal systems, such as order management systems (ERP) and customer management systems (CRM), while taking advantage of the scalability and performance of the cloud.

Conslusion

After exploring the features, advantages and disadvantages of cloud platforms and on-premise solutions for e-commerce, it is evident that each model has its own strengths and limitations. When considering which option is most suitable for your particular business, it is crucial to carefully evaluate the specific needs and objectives that your company has. Here is a summary of some key takeaways:

Flexibility vs. Control: Cloud platforms offer exceptional flexibility and the ability to scale easily, making them ideal for businesses that value agility and adaptability. On the other hand, on-premise solutions provide greater control over infrastructure and data, which can be essential for companies that require compliance with strict regulations or have specific customization needs.

Costs and Scalability: While cloud platforms can offer predictable costs and unprecedented scalability, on-premise solutions can involve higher upfront costs and limited scalability. It is important to weigh these factors and consider the available budget and long-term growth projections of the business.

Updates and Maintenance Management: Companies should consider who will be responsible for managing software updates and platform maintenance. While in cloud platforms, these tasks are handled by the provider, in on-premise solutions, the company takes responsibility, which may require additional resources in terms of staff and time.

Now is your turn!

If you are in the process of deciding between Cloud Platforms vs. On-Premise Solutions, surely you are already clear that there is no single answer that applies to all companies. Each business is unique and will require a different approach depending on the case and circumstances. They are complex decisions, it is true.

But, you are not alone on this path. It is always advisable to consult with e-commerce and technology experts to obtain personalized advice and make better-informed decisions, adapted to specific needs and that drive the long-term success of your business.

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